The UK’s pharmaceutical regulator would lose influence over the European Medicines Agency (EMA) if Britons vote to leave the EU in a June referendum. As a result, it could well consider aligning itself with its US equivalent, sector advisors have told EurActiv.com.

Experts say it is looking increasingly clear that the UK would lose the now London-based EMA if Britons vote to leave the EU in the looming 23 June referendum.

Sweden and Denmark have both expressed interest in hosting the regulator if the UK cannot keep it.

Denmark’s pharmaceutical industry is going head-to-head with its Swedish counterpart by arguing Denmark should be the new home of the European Medicines Agency (EMA) if Britons vote to leave the European Union in a June referendum.

The European Commission declined to comment on what would happen to the EMA in case of a Brexit scenario. But experts believe the UK could still, subject to negotiations, remain part of the EMA if it leaves the EU, although its influence on the body would likely wane.

“The pharmaceutical industry benefits from very harmonised regulation in Europe,” Jo Pisani, pharmaceutical and life science consulting leader at PwC in the UK, told EurActiv. “We could still benefit from this regulation under the EEA model, but we’d have less influence over it. In case of a full exit, we’d be put in a difficult position where we might be in the EMA but not have a say.”

If this happens, the UK could potentially try to join the US Foods and Drugs Agency (FDA), she said. “There’s been a lot of talk of a ‘superpower’ global regulatory body,” Pisani said.

This was echoed by another pharmaceutical and life science consultant who declined to be named because of the firm’s decision not to comment on the referendum. He said: “There’s no reason why we couldn’t work with the FDA in the US rather than the EU. This could benefit the market more generally as more and more countries are beginning to follow [the regulation of] the FDA.”

Others questioned the likelihood of the UK aligning itself with the FDA.

Susie Middlemiss, a partner at Slaughter and May, an international law firm, said it “would be challenging as it is a very different system”.

She added that it is “more likely that the UK would try to participate in the EMA regime as it would need to boost the capabilities of its own regulator”, the UK Medicines and Healthcare Products Regulatory Agency (MHRA).

A spokesperson for the FDA would not comment specifically on a potential linkage with MHRA but said the two regulators already have a “strong relationship” and that the FDA “would work with MHRA as it does with them today [in case of a Brexit], but also as it does with regulators such as Swissmedic, which is not part of the EU or EMA”.

“It is important to be aware that the EMA model is not identical to ours for medical product regulation, with the FDA’s remit being much broader,” the spokesperson added. “For example, clinical trials and pre-market development are regulated by individual countries, not EMA.”

MHRA declined to comment.

UPC central court division to be lost in Brexit scenario

Another body that the UK would likely lose if it leaves the EU is the Unified Patent Court (UPC), which is a proposed common patent court for all EU member states. The court will have a main central division in Paris and central division sections in London and Munich.

The British government last year signed a lease for the UPC in the new Aldgate Tower office building in the City of London, but the division would most likely have to be relocated if Brexit happens, experts said.

This could also impact the timing for getting the UPC up and running, since member states will have to decide where the division should be based instead.

“When the choice was made to put the seat of the central division in Paris with sections in Munich and London, the choice was the subject of much negotiation but it is now written into the UPC Agreement that there is a seat in London,” Middlemiss at Slaughter & May said. A Brexit decision would lead to further negotiations “and no doubt much lobbying” to choose a new location, with the Netherlands and Italy being top contenders, she added.

Luke McDonagh, Lecturer in IP Law at City University London, said in a blog post that Amsterdam could be an option for the UPC division, but that another option could be to move it to the main central division in Paris.

The UPC Secretariat did not reply to a request for comment.

Industry concerned about R&D funding

The pharmaceutical industry has been vocal in its opposition against Brexit. Earlier this month, 93 pharmaceutical and life science CEOs led by GlaxoSmith Kline’s Andrew Witty signed an open letter calling for the UK to stay in the EU. For example, they said that if the UK remains in the EU and British researchers and businesses continue to have access to EU funding, it would be easier to “attract investment for R&D activities”.

When global pharmaceutical companies decide whether or not to invest in the UK, unrestricted access to the EU market is important, said Karen Taylor, director, UK Centre for Health Solutions at Deloitte, in a note. She added that there is a risk that domestic research investment could suffer if the UK cannot remain part of the Innovation Medicines Initiative (IMI), an effort to bring together companies and researchers from different EU countries.

IMI is part funded by the EU but also by pharmaceutical companies, which could mitigate the impacts a Brexit decision would have on the UK’s access to IMI funding and influence over its work.

“Big pharmaceutical companies have a strong voice in IMI, so the UK would probably still get influence over it – the implications would be strongest for SMEs,” said Pisani at PwC. “It would be a big loss [for UK SMEs] to not be more involved from an innovations perspective.”

One potential upside for the UK pharmaceutical industry with Brexit is that the UK government “would not be constrained directly by the EU in considering tax incentives to drugs and life science companies if it was not subject to EU regulation,” said Middlemiss.

Other experts agreed, mentioning for example the UK compromise with Germany in 2014 to restrict the so-called “patent box” tax incentive scheme for UK drugs companies, which Germany said could result in unfair competition in the EU.

Background

The European Medicines Agency (EMA) is a European Union agency for the evaluation of medicinal products, which has been based in London since it started in 1995.

Roughly parallel to America's Food and Drug Administration (FDA), but without FDA-style centralisation, the EMA gets funding from the EU and the pharmaceutical industry, as well as indirect subsidies from member states. The EMA is meant to to harmonise (but not replace) the work of existing national medicine regulatory bodies.

The EU is currently the source of about one-third of the new drugs brought onto the world market each year.

A so-called Brexit could force the EMA to relocate to a new city inside the European Union.

Timeline

23 June: Referendum on Britain's continued membership of the European Union